Don't focus on short-term inflation, says BoE's Paul Fisher

The Bank of England must not get too concerned about short-term inflation and
set monetary policy for the longer term, Paul Fisher, the BoE's executive
director for markets, said in a newspaper interview.

Paul Fisher, the Bank of England's head of markets, said inflation was being pushed up by short-term factors, notably the rise in VAT sales tax and higher commodity prices.Photo: Jane Mingay

Reuters

10:41AM GMT 18 Jan 2011

The interview was published shortly before the release of UK inflation data for December which is expected to show consumer price inflation remaining well above the BoE's 2pc target.

"Yes, it's very uncomfortable - inflation is four percent now - but I wouldn't want to go back and change policy," Fisher told the Yorkshire Post.

He reiterated that inflation was being pushed up by short-term factors, notably the rise in VAT sales tax and higher commodity prices.

"We have to look through those short-term things, despite whatever unpopularity comes our way, to try and set the best policy rates for the medium term," Mr Fisher said.